US home sales were flat in August

WASHINGTON (AP) — U.S. sales of existing homes were unchanged in August, as a shortage of houses priced at less than $250,000 – a level considered to be affordable for the middle class – has become a drag on the real-estate market.

The National Association of Realtors said today homes sold last month at a seasonally adjusted annual pace of 5.34 million. Existing home sales have fallen 1.5 percent during the past 12 months.

Price gains are moderating, and the total number of sales listings is increasing, a marked change from roughly three years' worth of annual declines in inventory. But the sales momentum is increasingly concentrated on homes worth more than $500,000, while sales of homes worth less than $250,000 have tumbled over the past year.

Still viewed as a foundation for the U.S. middle class, home ownership has become a challenge for many Americans as prices have been rising at a faster pace than incomes for roughly the past five years.

The relative robust job market has boosted demand over the past year, yet borrowing costs have shot up and created affordability pressures that are relegating many would-be buyers to the sidelines.

"A strong economy is no longer enough to prop up home buying demand," said Cheryl Young, a senior economist at the real estate company Trulia. "Home buyers are sensing that the market is near or at an apex and many are pulling back to see when prices may finally begin to tip in their favor."

There were 1.92 million existing homes for sale at the end of August, up from 1.87 million a year ago.